AG Michael Ferguson 20131204

Michael Ferguson, Canada's Auditor General, found that by August 2013, CanNor had more employees located in the Ottawa liaison office than at headquarters in Iqaluit. (Adrian Wyld/Canadian Press)

The $52 million Canadian Northern Economic Development Agency, or CanNor, “is not adequately monitoring the contributions it pays out” and “doesn’t know whether the funding they are providing is making a difference to economic development in the North,” said Canada’s Auditor General, Michael Ferguson, in a news conference this morning.  

CanNor was established in 2009 as a way to spur economic development in all three territories.

But in his spring audit, Ferguson problems with the way projects the agency funds are assessed and grants are monitored. 

In particular, he found that only three out of 11 projects granted money under its Community Economic Development Program were adequately assessed.

“For example, one application simply stated that funding was for business support for a convenience store, motel, and gas bar without specifying the activities to be carried out or the expected results,” the report reads. “The agency did not ask the applicant to provide the missing information before completing the assessment and funding the project.”

In another case, funding for a project was approved before an application was even received.

In most cases, however, the agency took about nine months from the time it received an application to the time it signed a contribution agreement, leaving the grant recipients little time to use the money they received.

The audit also found problems with the way the agency monitors its contribution agreements.

In some cases, payments were made to recipients before contribution agreements were signed.

Northern agency relies on Ottawa staff

The same report found that by August 2013, CanNor had more employees located in the Ottawa liaison office than at headquarters in Iqaluit.

That's despite the agency's original plan, which estimated 45 per cent of its staff would work in Iqaluit, with the rest in offices in Whitehorse and Yellowknife and just under 10 per cent of staff in Ottawa.

The Ottawa positions include “key corporate functions,” including policy, planning, and communications as well as the vice president for policy, planning, communications and the Northern Project Management Office and the senior advisor for Inuit community relations.

Of 32 positions advertised in Iqaluit, only 15 were filled, including some temporary positions, though six competitions were in progress at the time of the audit.

The audit also found CanNor “has not yet finalized its Inuit employment plan,” required for government organizations in the territory, under the Nunavut Land Claim, although its human resources plan did include a target of 50 per cent Inuit staff at its Iqaluit’s headquarters.

As of August 2013, 25 percent of the Agency’s Iqaluit employees were Inuit.

In an agency response included in the auditor general’s report, CanNor says it’s “committed to achieving a professional workforce that represents the clients it serves,” and is working to address the problems.  

Leona Aglukkaq responds

In a statement, Leona Aglukkaq, the minister responsible for CanNor, said the agency “has already taken steps and made progress in addressing these recommendations.”

Since 2009, CanNor has invested over $185 million across the North, including $27 million in adult basic education in 2012.

Grants have also gone towards community involvement in mining, geoscience, business capacity, local infrastructure and participation in Nunavut’s offshore fishing industry.

The agency says it is working on improving the ways it reviews applications and overseeing funding. CanNor also says it has doubled its northern staff since 2010 and is adding nine new positions to the Iqaluit office this year.